Rondaben Posted February 8, 2017 Share Posted February 8, 2017 First, thank you all in advance for your answers. I am beginning a PA program this fall. I'm an older student (45) and am coming from a hospital lab background. A company that I co-own provides short term contract staffing for several hospitals in the area so I am very familiar with both the challenges and benefits of working as an IC vs. W2 employee in healthcare. First, I am located in Texas. Is it easier to find a IC position than W2 in your experience? I would prefer to maintain that status after school if possible because of the way the business and my personal assets are currently structured. Second, those of you that do work IC are licensure, malpractice, etc. business expenses paid as part of the contract or are they typically business expenses incurred by you? Finally, What range of compensation would I be expecting as a new graduate for an IC position? I know that is a complex question based on specialty, metro vs. rural, etc. It is my intent to stay in rural areas. Again, thank you for your help! Link to comment Share on other sites More sharing options...
ohiovolffemtp Posted February 9, 2017 Share Posted February 9, 2017 I've worked PT in an UC as a 1099 contractor to supplement my FT W2 ED job. PT job was hourly only, no benefits, expense $'s for license (it was in a different state than my primary license). I explored other 1099 work and found it the same elsewhere. 1099 work was hourly only. A staffing firm would pay some travel or lodging expenses, but nothing else. Link to comment Share on other sites More sharing options...
Boatswain2PA Posted February 9, 2017 Share Posted February 9, 2017 I work mostly 1099 and get no benefits, but I get about 20% more hourly pay. I almost went full time to a W-2 job once (nice boss begged me to come full time and help), but after I did I found out they only offered 1 week off PTO. Quickly converted back to part-time there (and then dropped myself from schedule) and went back to 1099 so I could control my own schedule. Link to comment Share on other sites More sharing options...
Rondaben Posted February 9, 2017 Author Share Posted February 9, 2017 Thanks for the information! It's been my experience as a 1099 that I have much more flexibility to manage tax liability, student loan repayments, and health-care by costs so that there is a significant boost to the bottom line. Do you find that practices are hesitant to go 1099 vs w2? I know that I have seen a mixed bag from the lab standpoint with regards to hospitals agreeing to a contract paying with a 1099. Link to comment Share on other sites More sharing options...
Boatswain2PA Posted February 9, 2017 Share Posted February 9, 2017 I don't know how 1099 gives you more flexibility to manage student loan repayments. Student loans are the devil, I wouldn't want to "manage" them, I would want to hit them in the face every two weeks until they are gone from my life.Managing tax liability as a 1099 can be more difficult than many people think. It's easy to say "I'll just put this on the business card" because it (whatever you just bought) just became 1/3 cheaper....which can often lead to overspending. On a related note, remember that net 1099 pay is taxed at about 7.5% MORE than W-2 pay because you're paying both employee and employER contributions to SS. Sounds like you've done this before, so I'm sure you're aware, but just posting it here for other readers.Regarding practices hesitant to do 1099....yes, some. I do part time at a national CMG and they don't allow PA/NPs to be 1099 in my state (although they allow physicians...I'm working on that). There is also a small hospital about 1.5 hours from where I live that I've been talking with, on and off for almost 2 years now, about covering their ED but they are hesitant to do 1099 as well. Actually, I think they are just hesitant to pay me what I want as a 1099 vice what they want to pay as a W2 (I don't think their number-crunchers understand that I'm cheaper to them as a 1099 than as a W2). Link to comment Share on other sites More sharing options...
Rondaben Posted February 9, 2017 Author Share Posted February 9, 2017 I understand that Boatswain! You can provide service cheaper to them when they figure the overall cost of employment but many never get that far. One mechanism that works on the student loan route is the use of IBR in conjunction with a LLC that receives your checks an the 1099. As an employee and owner you can control how much your individual income is as an independent contractor. As an example say you make 100k. You take 50k as a salary and then have all of your deductions--uniform, mileage, insurance, meals and incidentals, etc. This brings your AGI down quite low after you add in your standard or itemized deductions. IBR repayments, subsidies for ACA health insurance are both based this much lower AGI so relative cost for them drop to very manageable levels. After 20 years of these manageable payments the remainder is forgiven. The rest of the income you made? Roll that into say property investments so as to not get hit on pass-thru taxes. Link to comment Share on other sites More sharing options...
camoman1234 Posted February 9, 2017 Share Posted February 9, 2017 I work mostly 1099 and get no benefits, but I get about 20% more hourly pay. I almost went full time to a W-2 job once (nice boss begged me to come full time and help), but after I did I found out they only offered 1 week off PTO. Quickly converted back to part-time there (and then dropped myself from schedule) and went back to 1099 so I could control my own schedule. Do you mind letting me know what 1099 position you are working? Link to comment Share on other sites More sharing options...
Boatswain2PA Posted February 9, 2017 Share Posted February 9, 2017 ...One mechanism that works on the student loan route is the use of IBR in conjunction with a LLC that receives your checks an the 1099. ... After 20 years of these manageable payments the remainder is forgiven.... And be in debt for 20 years? No thanks. As a PA you can make FAR more than $100K a year by working hard (I grossed over $200K last year), giving you a big shovel to hit the debt in the face and be FREE! Just an example, if someone were to use your method and then, 10 years into it (and still owing huge amounts in student loans cause you haven't really paid anything toward them) you get the PERFECT job offer, but it's as a W-2. PERFECT offer...great pay, great location, great specialty, great office/doc/staff/etc. Do you take the perfect job? If so, now you've gotta start paying off the student loans. Debt sucks. It makes you a slave. As to the rest, yes, concur...but it's a lot of work to get some government benefits (IBR, ACA) and save on some taxes. I also think it's questionable to just give yourself a $50K salary as IRS rules the salary/hourly wage must be "reasonable". A $50K salary is equivalent to $25/hour, which is unreasonable for a PA. If you were to work HARD (3000+ hrs/year instead of 2000 hrs/year) that $50K salary would be even more UNreasonable, and open yourself to harsh IRS review/penalties. Instead of giving a $50K/year salary, if I were to do it your way I would pay myself $45/hour. Link to comment Share on other sites More sharing options...
Rondaben Posted February 9, 2017 Author Share Posted February 9, 2017 Great points Boatswain...A lot to think about indeed. I really appreciate your input! Link to comment Share on other sites More sharing options...
Boatswain2PA Posted February 9, 2017 Share Posted February 9, 2017 Do you mind letting me know what 1099 position you are working? I work in various EDs, mostly rural. Some of this is through a locums group, but much of it is directly with hospitals. Link to comment Share on other sites More sharing options...
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